US natgas prices drop 5% on forecasts for less demand
24/04/2024 15:34
April 24 (Reuters) - U.S. natural gas futures slipped about 5% on Wednesday on an outlook for reduced heating demand next
week and on the eve of a closely watched weekly federal storage report.
Front-month gas futures NGc1 for May delivery on the New York Mercantile Exchange traded 8.5 cents lower, or 4.7%, to $1.73
per million British thermal units (mmBtu) at 10:20 a.m. EDT.
"This is just some repositioning ahead of storage report due tomorrow and along with that we are approaching the May contract
expiration towards the end of April here," which is weighing down the natgas market, said Robert DiDona of Energy Ventures
Analysis.
The U.S. Energy Information Administration (EIA) will release its weekly storage report at 10:30 a.m. ET (1530 GMT), Thursday.
Analysts forecast gas stockpiles were over 35% above normal levels for this time of year. EIA/GAS NGAS/POLL
LSEG forecasts gas demand in the Lower 48 states, including exports, to fall to 92.7 bcfd next week from 98.0 bcfd this week.
In summers "as we progress into May and June, we will start to see higher electric demand, that will give us higher power
burns and we start to move out of these maintenance events and if LNG production doesn't grow or respond higher, we are likely to
see tighter balances, which will help reduce the current storage overhang," DiDona added.
On a daily basis, LNG feedgas was at 12.4 bcfd as the amount of gas flowing to Freeport LNG climbs to 0.5 bcfd from 0.1 bcfd
on Friday.
The first tanker in 12 days set sail from Freeport LNG's Texas export terminal on Tuesday, signaling the resumption of gas
processing after an outage earlier this month.
Freeport LNG has been plagued with issues since Winter Storm Heather damaged equipment earlier in January, ANZ Research said
in a note.
"There are signs that production may resume shortly, we don’t expect it to be back to full capacity for a couple of months,"
ANZ added.
Financial firm LSEG said gas output in the Lower 48 U.S. states have fallen to an average of 96.8 billion cubic feet per day
(bcfd) in April from 100.8 bcfd in March. That compares with a monthly record of 105.6 bcfd in December 2023.
U.S. gas production has dropped by around 10% in 2024 as several energy firms, including EQT EQT.N and Chesapeake Energy
CHK.O , delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and
March.
EQT is currently the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with
Southwestern Energy SWN.N .
Meanwhile, in Europe gas prices traded higher, as planned and unplanned outages in Norway and Britain tightened the supply
picture, offsetting a return to milder temperatures. NG/EU
Week ended Week ended Year ago Five-year
Apr 19 Apr 12 Apr 19 average
Forecast Actual Apr 19
U.S. weekly natgas storage change (bcf): +64 +50 +77 +59
U.S. total natgas in storage (bcf): 2,397 2,333 1,986 1,770
U.S. total storage versus 5-year average 35.4% 36.4%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2023 (2018-2022)
Henry Hub NGc1 2.20 2.66 3.60
1.80 1.80
Title Transfer Facility (TTF) TRNLTTFMc1 13.49 13.04 14.39
8.82 10.53
Japan Korea Marker (JKM) JKMc1 12.34 14.39 14.31
10.23 10.50
LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year
Norm Norm
U.S. GFS HDDs
71 89 130 155 157
U.S. GFS CDDs
70 59 30 36 33
U.S. GFS TDDs
141 148 160 191 190
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2019-2023)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 101.3 95.0
97.3 96.8 96.9
U.S. Imports from Canada 7.6 7.8
6.9 7.0 6.7
U.S. LNG Imports 0.0 0.0
0.0 0.0 0.0
Total U.S. Supply 108.9 102.8
104.2 103.8 103.6
U.S. Demand (bcfd)
U.S. Exports to Canada 1.9 2.4
2.7 2.1 2.1
U.S. Exports to Mexico 6.0 5.4
6.8 6.7 6.5
U.S. LNG Exports 14.4 10.1
10.7 11.9 12.4
U.S. Commercial 7.4 8.4
6.7 7.8 5.8
U.S. Residential 9.6 11.8
8.0 10.1 6.4
U.S. Power Plant 25.6 22.7
28.5 29.2 30.4
U.S. Industrial 21.5 25.9
22.5 23.3 22.3
U.S. Plant Fuel 4.9 5.0
4.8 4.8 4.8
U.S. Pipe Distribution 2.1 2.3
1.9 2.1 1.9
U.S. Vehicle Fuel 0.1 0.1
0.1 0.1 0.1
Total U.S. Consumption 71.2 76.2
72.6 77.3 71.7
Total U.S. Demand 93.5 94.1
92.7 98.0 92.7
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended
Week ended Apr 19 Apr 12 Apr 5 Mar 29
Apr 26
Wind 18 16 15 16
13
Solar 7 6 5 5
6
Hydro 7 7 7 8
7
Other 2 1 1 1
1
Petroleum 0 0 0 0
0
Natural Gas 35 37 38 38
39
Coal 13 13 13 13
13
Nuclear 19 20 20 19
20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL
1.59 1.64
Transco Z6 New York NG-CG-NY-SNL
1.49 1.47
PG&E Citygate NG-CG-PGE-SNL
2.34 2.22
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
1.44 1.33
Chicago Citygate NG-CG-CH-SNL
1.49 1.45
Algonquin Citygate NG-CG-BS-SNL
1.67 1.60
SoCal Citygate NG-SCL-CGT-SNL
1.66 1.54
Waha Hub NG-WAH-WTX-SNL
1.37 1.21
AECO NG-ASH-ALB-SNL
1.11 1.19
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL
27.50 27.00
PJM West EL-PK-PJMW-SNL
32.50 24.50
Ercot North EL-PK-ERTN-SNL
34.00 12.75
Mid C EL-PK-MIDC-SNL
37.50 44.00
Palo Verde EL-PK-PLVD-SNL
3.25 9.50
SP-15 EL-PK-SP15-SNL
-1.50 4.00
(Reporting by Daksh Grover in Bengaluru; Editing by David Gregorio)
((Daksh.Grover@thomsonreuters.com;))
((For gas data on LSEG's Eikon type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the Eikon terminal
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER
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